US Government Warns of Economic Risks from China's Industrial Overcapacity

The Biden administration has raised concerns about China's industrial manufacturing overcapacity, citing significant global economic spillovers. Under Secretary Jay Shambaugh indicated defensive actions might be necessary to protect firms and workers, suggesting the need for creative trade measures. The US seeks collaborative solutions with global partners, including China.

The Biden administration expressed grave concerns about China's industrial manufacturing overcapacity on Wednesday, pointing to its significant global spillovers. They warned that addressing these challenges might require taking defensive measures to protect American businesses and workers.

Under Secretary for International Affairs Jay Shambaugh highlighted that China's macroeconomic imbalances and non-market policies pose risks to global economic resilience and the supply chain. The US, along with its allies, seeks to collectively address these issues.

Shambaugh noted that defensive actions against overcapacity or dumping are not anti-trade but necessary to safeguard economic interests. He urged China to take internal measures to mitigate these issues, emphasizing that the US would prefer cooperative solutions but is prepared to act unilaterally if needed.